Art, a “boutique” investment?

By Michael Russell

Buying art is considered a ’boutique’ investment or something that is off the beaten track. However, is this really the case? Unlike other forms of investment, economic conditions do not affect the art market much.

The art scene has its own rhythm, mostly influenced by the artist’s quality of work and excitement of the collectors. It has more to do with cycles. Basically, art investors would only buy a piece which they think will increase in value in the future and bearing in mind that art is a mid to long term investment.

People who bought art produced in the 1960s have managed to secure 500% returns on investment. However, the pieces are done by pioneer artists who started their careers in the 1960s, or earlier.

New collectors need to practice caution and not be carried away with hype and expensive art. When it comes to art investment, it can either be a costly or affordable endeavor, so it all depends on the investment.

Potential investors might initially be turned off by the price of art. However, you can start off with lesser-known artists whose paintings are relatively cheaper. You can start with as little as $500 and build up your collection from there. The initial cost of buying art would depend very much on the artist. Pioneer or seniors can command prices ranging from $40,000 to $100,000 while works from second-generation or mid-career artists range from $10,000 to $50,000, depending on the size.

So, what is good investment value? There are two important factors; style and consistency, which depend very much on the artist’s commitment level. The investment value also depends significantly on the artist’s track record, which includes their exhibition record, collection, marketability and length of career (new, mid-career or senior).

Artists with good track records are often popular. However, popularity may be hyped up. Price and quality do not necessarily go hand in hand. More importantly, it’s the psychological worth that determines the price. Similarly, investing in established artists doesn’t necessarily guarantee good investment value either as sometimes their work can decline.

There is a suggestion for collectors to buy works of artists who are growing in value rather than those who are at their peak. Works of mid-career artists are often considered to have potential for higher investment value. On the other hand, works of most pioneer or senior artists, have reached their price ceiling.

For collectors who are particularly new and budget-conscious, consider works of young artists, as they are more affordable. There is also a chance that the painting’s worth might double or triple in five years’ time.

The art world is not easy to navigate, especially for new investors. Getting to know artists, movements, genres and periods is one part of the problems and becoming competent at identifying works of art can take a long time.

You need to identify your own taste, so ask yourself why you like certain art and dislike others. Serious art investors also need to know which types of art sell and which do not. Moreover, talk to as many people as possible, from curators and gallery owners to artists.

In many ways, investing in art is like investing in your taste, which is why loving what you buy is important. People who buy art because they love the piece, end up getting very good investment value.

Whatever the reason, you may not always get great monetary returns from an engaging art piece but it can provide you with a lifetime of visual pleasure.

Michael Russell

Selecting a gallery, which is right for you.

Finding a gallery is one thing, getting them to represent you is another and for most Artists the idea of self promotion is a tricky one. There is no set way to do this but with a few tips you can formulate a way which fits to your way of working and hopefully theirs.

Dealing with a gallery and asking for representation means you may find some will reject your work, so you need to be able to deal with criticism and rejection. Note: it does not mean your work is not good, it may be for a range of reasons, the gallery has a different direction, they know what will sell, they may have a full stable of artists etc.

The aim therefore in approaching galleries for representation is to do some homework to avoid the annoyance and frustration, which goes with rejection. Therefore find a gallery, which is stylistically similar to your work (e.g. abstract, sculptural etc.) Even if a friend recommends you and the gallery is keen, check them out in advance to see if there is a match to you type of work. These days most galleries have a website making it easier to do research at a distance.

Now you are thinking about galleries and getting started consider some questions you need to ask and others you want to ask, then set about making contact.

Aim to visit the galleries you have selected and get a feel for how it looks, what they do and preferably check out a group show of artists they represent. Note at this stage you have not shown them any work or chatted to them yet, your research is still anonymous at this stage.

Now you have visited a bunch of galleries make a short list of ones you would prefer to be represented by. Now aim to make contact by firstly figuring out who the director/s are and then seeing if you know anyone who knows them (referrals can be a great way to get a “foot in the door” and easier than a “cold call”).

Then build the relationship, perhaps chat to the receptionist on the phone first, to see if they have a protocol for representation (a form or similar). Then follow whatever protocol they use. Perhaps they want to see your website, or an email with an attachment of recent images of your work first.

Each time you make contact you build opportunities to make more contact and therefore build the relationship. If you sent images or provided your website for them to look at, call them back to see what’s happening.

Also, be sure to get on mailing lists of galleries. The aim being to keep yourself informed as to how things are happening in the art community you want to be a part of.

All the best in your search for a gallery, you have probably just realised selling your art is nearly as challenging as making it in the first place!

Valuing artworks…

By Robert Bear

Let’s assume you’re an artist and want to sell a painting. How do you set a sales price? This should be a helpful guide to those wanting to know how initial prices of a work are determined.

To start with, you have to consider legitimate expenses: outlay of materials, approximate rate of utilities while producing the work, expenses for research and photography, travel, fees for models, studio space rental, copyright use, framing, storage, etc. These are all things you can document with a paper trail and receipts. Next, you have to consider a wage for your time in production. How much is your time worth and dependent on your skill? Should you reasonably expect to get more if you have a master’s degree in painting, or are a beginner? (It may be interesting to note that most artists in the U.S. do not even make minimum wage on the sales of their work.) Which brings up another issue, how do you recoup your expenses for classes and education or training in art? If you have limited edition signed and numbered reproductions of a painting made, how much should the price of the painting be raised?

These are just some considerations. Some artists simplify this by using a formula, like $6 per square inch plus the cost of framing.

So, you have a price in mind and want to be represented by a gallery. You go to a few galleries and find out their commissions vary from 30 to 50 percent of the sales price. After evaluating gallery requirements and expectations you decide that in order to get the price you had in mind, for example $850, now must become $1,140 with a 40% gallery take included. Other issues involved are not limited to whether or not the gallery can expect to sell it at that price in its market and the galleries’ insurance liabilities and limitations.

Here are some other questions regarding artist’s pricing. Suppose you have some paintings in galleries and try to liquidate some others yourself. From an ethical standpoint, can you sell a similar work for $850 (knowing it would sell easier at that price), or should you charge the same as the gallery, $1,140? Can a similar painting sell for more in a different location of the country? Watercolors typically sell for less than oils of comparable size, therefore, how do you adjust prices? What do you charge in adjustment for a vignette of the same dimensions as a full composition piece? Additionally, suppose you have participated in some juried exhibitions and some of your works have won awards. Do you now raise the prices of these, and if so, how much (I’ve known some who double the price.)?

The artist also sees value in their art as a possible source of residual income. This comes in two forms. One is through royalty payments with the paid use of their copyrighted and licensed materials. The second and more obscure to most, is through percentages of repeated sales of the same art work. This is accomplished in a contract purchase where the artist or their estate is guaranteed a certain amount of the purchase each time the work is bought by a different patron. Both of these require the use of a good attorney that specializes in art sales contracts.

Since I mentioned insurance before, let’s look at value from under that hat. Dollar amounts may reflect differently from the insurer and the insured. What you think a piece is worth may need to be documented with a certified appraiser’s estimate and even appraisers amounts will vary. Another method is to verify a “track record” of sales amounts. An owner of an art purchase will need to show a receipt. Since values of art vary over the years, one should get updated estimates that reflect inflation. On the other hand, an insurer of a gallery may just take a gallery owner’s document on total amounts of consignment contracts.

Suppose you own art and want to donate it to a non-profit organization. Now the federal government has stepped in. If you want to claim an amount for tax purposes you have to verify a claim with a receipt. Unless you are the artist, then it’s a whole other ball game. Uncle Sam now says you can only claim the actual value of the tangible materials that make up the piece. Your time and other expenses are null and void. So, your piece basically becomes worthless, which brings us to the next three berets of value I can relate to under the voice of experience, 1) estate of the deceased, 2) bankruptcy , and 3) loan value.

In the event of settling an estate, unless one has receipts to verify worth, you can expect to get, or list, garage sale prices (GSP). Here you also have the option of using a professional appraiser to assign a value. In the unfortunate case of a bankruptcy, you can expect to keep art listed as “wall coverings” also valued at “garage sale prices”, to sell it at the GSP level, or at minimum, much lower values than your track record of sales. Banks have their own capricious policies in terms of the value of art as collateral. Some won’t accept it, some require a certified appraised estimate, which will be in a range from “X” dollars to “X” dollars and as you can rightly guess, the lower amount will be used. Furthermore, you can expect the bank to allow no more than 75% of that number as collateral value. Some will have their own value of several art pieces (note the plural here) by stating that they will accept the art for a $500 loan, this is, in effect, actually a signature loan and the art has no collateral value.

Take the stance of an investor now. Several years ago “Money” magazine published their best long term investments for 15 and 30 year periods. Ranked at numbers 2 and 3 over these periods was original, contemporary art. If you are looking at long term strategies, then a serious glance at art values is important. As an investor, unless you purchase art at auction, you can generally negotiate a purchase price with a gallery or an artist. This demonstrates there can be a difference between perceived and real value for a work. If you buy art just because you like it, it may not be a monetary investment. Prior to investing in art, you need to consider all of the topics mentioned above in deciding what to look for as “value” in buying art. Two things here that also affect the value of art is the notoriety of artist in combination with market supply and demand.

With all this said, the ultimate monetary value of any art work is only the highest amount at any given time that someone is willing to pay.

Up to now we have taken a cursory look at art in terms of tangible market values. Here are a few non-monetary assessments of art work worth: cultural significance, educational and instructional relevance, historical documentation and study, therapeutic value (which can also be seen as an investment), and aesthetic attachment. Each one of these deserves their own treatise at another time.

The “value of art” to each person is a rough diamond. Increasing its worth will depend on the skill of the cutter to weld a working philosophical construct of value with practical applications to be employed as a tool to expose its many exquisite faces. Undoubtedly, theoretical physicists will prove a string theory for the universe before there is any global “value of art” recognized throughout all societies and cultures.

Robert E. Bear is a professional educator and national award winning wildlife artist. He has been recognized in Who’s Who In America, Who’s Who In American Education, and National Honor Society Outstanding American Teachers. He has created the Star Poster Program, the game of Gig’l(TM), and the team sport of Bearball(TM). His additional writings and paintings may be viewed at http://www.ursidaeenterprises.com

Your own art book…

I have been looking into this sort of book publishing site for a while and I saw one that seems quite good, impress your friends, psyche out the gallery guys! you download some software, create your book, upload it and sell it online…

Here’s one I prepared earlier called Urbane. Check it out and see what others are up to while you are there. 

urbane-cover

The thought of having my own glossy “coffee table book” was to good to refuse, oh and if you want just one, then so be it! the possibilities are endless!

Protecting your art investment during a recession

By Judith A Tartt

During a recession, it is vital to protect your assets. If you’re an art investor, you may be wondering, “How can I protect my art investments during a recession?” Following are three steps you can take to do so.

Three Steps to Protecting the Value of Your Art Investments During Troubling Economic Times

1. Don’t Panic and Sell: One of the things that happen during a recession is that your assets can lose value. This limits your ability to sell it to generate income if you should need to. And, like a real estate investment, who wants to sell in a recessed market?

In this case, the best way to protect your art investments during a recession is not to sell. Instead, look for ways to cut expenses and hold onto your investment for when the market corrects itself, which leads to the second way to protect your art investments, staying liquid.

2. Sustain Liquidity: As alluded above, some may find it necessary to sell their art investments during a recession to make ends meet. This is usually because they don’t have enough cash on hand to cover expenses for an extended period of time.

Many think of art investors as rich or well-to-do. And, some are. Many, however, are average working folk who’ve been lucky enough to sock a few hundred or a few thousand dollars into a piece of art – this is all an art investment is.

As ordinary working folk, art investors should follow the financial planning advice almost everyone who’s not Bill Gates rich should follow – keep enough cash on hand to cover six to eight months of expenses (or more if you can afford it).

This way, you won’t be forced to sell an art investment you’d rather keep – and watch appreciate – for years to come.

3. Don’t Over Invest: As in, don’t pay too much for a piece. As an art investor, how do you prevent over investing in a piece – especially if you’ve fallen in love with it?

Quite simply, you learn about the artist, specifically: (i) are they represented by an agency; (ii) what have their other works fetched; (iii) what are some of their recent showings; and (iv) what do their art reviews say.

Knowing this type of detail will give you a clear indication not only of the current value of the piece, but its likely future value as well.

Over and beyond this, get an official appraisal from a qualified, certified art appraiser.

Protecting the value of your art investments during troubled economic times is not hard. It’s the same as protecting any of your assets – pay attention, don’t panic and sell, and keep ready cash on hand to handle day-to-day living expenses.

If you do these things, you can ride out volatile markets – and profit from your art investments during boom times.

Investing in art – A starting point

If you are curious to invest in something else than real estate or stocks, art might be an option. Previous investment experience (in real estate or in financial markets) will most certainly determine your approach when exploring Art investments.

For example; if you are fully focused on short term profits, in which case your investment approach resembles speculation, than you are able to use this approach in what ever investment field. It may be more difficult because of the money (and time) that is required but real estate speculation or speculative stock trading is done by a set of familiar rules. And so will it be when investing in art.

If your (financial) investment approach is more fundamental and you are more committed to a specific way to invest and concerned about the companies to invest in, than this will lead to a different investment game. Especially when focusing on art.

This commitment is what makes art worth while to invest in. You could be committed to creativity in general. In that case you can’t hardly do anything wrong, because you could defend every investment with your own story – “this painting is special. I know the artist is not very well known, but that’s exactly why I’ve bought it.” You invest because of your own judgment and according to your own criteria.” 
This kind of investment approach resembles the stock-picking method in financial investments, you buy what others ignore.

The next thing would be to follow the market, and search for (popularity) trends of artists. This is much less fundamental and resembles technical analysis; stock A is rising and you imagine that it will continue to do so. For a while. This requires little knowledge is provides a good starting point for next steps in which you may broaden your investment scope.

As in the financial investments area, there is also the art-investment guru. The advisor who knows all the ins-and-outs about investing in art. He or she will first (have to) ask you what your preferences are, because also that is not different from financial investments; it starts with the question, “what do you want.”

Buying an Art investment Fund is probably the best thing to start with. It offers you a lot of information and while having set your first steps in art-investments, you can think of what you really want. Probably something different; well, it is.

© 2006 Hans Bool

What is Abstract Art?

dscf0045

By Annette Labedzki

Abstract Art refers to all those works of art, which are carried out in compliance with the principle that Lines, Forms, and Colors have aesthetic value. An Abstract Artist is like a poet arranging compositions and colors, which are devoid of normal subject matter. Abstract Art does not try to imitate or express any external reality and is non-objective.

Abstract Art was introduced into serious art sometime in early Eighteenth Century. It started with a movement called Impressionism, which produced art, which was devoid of any realistic, defined images. Impressionism talked about depicting nature in its truest form. The artists of this art form were mostly interested in capturing changes in light throughout the day, from one season to another. Abstract Art is generally divided into two groups, the Action Painting and the Color Field.

In the Twentieth Century, several other movements such as, Fauvism & Cubism contributed in breaking new grounds. Fauvist used colors in non-realist ways and Cubism brought in the idea of painting an object from more than one standpoint. In addition, Abstract Expressionism, which surfaced in the 1940s, is all about spontaneous, automatic, or subconscious creation. In Abstract Art, the artists express themselves through an aggregation of the emotional strength and self-denial. This expression is coupled with the anti-figurative feels of the European Abstract Doctrine, specified as Futurism, the Bauhaus, and Synthetic Cubism. European Movement was the predecessor of Surrealism. Some of the most famous Cubists were Pablo Picasso and Georges Braque. The Leaders of Fauvism were Henri Matisse and André Derain. Two of the most famous examples of Abstract Expressionism were Mark Rothko and Jackson Pollock.

Many artists believe that the true work of art is an esoteric, incomprehensible, and mystical creation. Abstract Art distinguishes itself from the artist and acquires an identity of its own with an independent life. In effect, we can say that an Abstract Artwork in itself becomes a living personality having a real existence of being. Abstract Art speaks for itself and points to the social, cultural, and the intellectual hoo-ha of the times.

In the 21st Century, there is a wide array of ideas available for the artists as the new schools of thoughts have emerged, for e.g., Figurative Art, which comprises of Neo-Dada, Fluxus, Conceptual Art, Neo-expressionism, Installation Art, Performance Art, Video Art, and Pop Art. All this has made it hard to distinguish between Figurative Art and Abstract Art, still abstraction remains very much in view.

Annette Labedzki received her BFA at the Emily Carr College of Art and Design in Vancouver, B.C. Canada. She has more than 25 years experience. She is the founder and developer of an online art gallery featuring original art from all over the world. It is a great site for art collectors to buy original art. Is is also a venue for artists to display and sell their art . Artists can join for free and their image upload is unlimited. Please visit the website at http://www.labedzki-art.com

What is art?

While out jogging one afternoon it came to me, an epiphany; ” There is a simple, comprehensive definition of “art”, it’s an acronym for itself”.

The Aesthetic Rendering of Thought.

In order for Art to exist, the following three (3) criteria must be met. First of all, there must be some sensory manifestation (Rendering), fugitive or permanent, which is based upon a creative, intellectual process (Thought) with the intention of a beautiful or pleasurable (Aesthetic or Anti-aesthetic) action, or reaction, in one or more of the senses and/or psyche.

Encircled within this definition are more than the traditional concepts of “art”: painting, sculpture, ceramics, writing, architecture, drama, music, dance, and photography. It’s now easier to understand why cooking can be included as an “art” and more than just a craft.

Robert E. Bear is a professional educator and national award winning wildlife artist. He has been recognized in Who’s Who In America, Who’s Who In American Education, and National Honor Soceity Outstanding American Teachers. He has created the Star Poster Progra, the game of Gig’l(TM), and the team sport of Bearball(TM). His additional writings on art and eduation, as well as, paintings may be seen at http://www.ursidaeenterprises.com